“In Siemens, we have completely digitalised our International Trade & Customs procedure” – Dr Sant

In conversation with Dr Pramod Sant

With a focus on electrification, automation and digitalisation, Siemens India stands for engineering excellence, innovation and reliability. As one of the world’s biggest producers of energy-efficient, resource-saving technologies, Siemens is a pioneer in infrastructure and energy solutions, automation and software for industry and is a leader in medical diagnosis.

Supply Chain Management at Siemens fully exploits the potential of global purchasing markets, and at the same time provides reliable, end-to-end supply chains. Dr Pramod Sant, Vice President – Head of Import Export and Customs at Siemens Ltd during his three decades in the organisation has successfully driven several wings within the company. His indispensable knowledge is an asset for tomorrow’s supply chain professionals.

Dr Sant, in an exclusive interview to Logistics Insider, talks about how digitalisation has transformed the way Siemens’ supply chain network operates and gives a checklist of the traits they look for while choosing a logistics service provider. Excerpts:

How the EXIM trade has been impacted post introduction of GST in the Logistics Sector?

After the implementation of GST, we have seen a positive impact in the Logistics Sector. This impact can be summarised under the following main area.

  • Ease of movement of goods- Due to one country one Tax regime and abolition of permits and octroi (In Mumbai) goods movement have become easy and faster. Vehicles are able to travel at a much faster speed and resulting in improved TAT.
  • Redesign of Supply Chain – Now there is no need to have state-wise hubs and supply chain distribution can be redesigned resulting in more smart and efficient model.
  • Investment in Infrastructure – Logistics sector has started attracted investment especially in warehouses and building capacities. We are seeing consolidation of warehouse sector.
  • More value added service – Now logistic service providers like 3PL are able to focus on more value-added services as input credit can be claimed.

What are the major challenges do you face while dealing with the logistics of electronic goods and how do you counter challenges related to logistics of such goods?

Firstly, even today the electronic goods industry depends on external sourcing as there are very fewer components manufactures in India. This results in challenges related to inbound logistics.

  • Cost v/s speed – very high cost of transport especially express when products to be shipped by express road or air.
  • Electronic items are smaller in weight and much more sensitive to handling and results in damages.
  • Problem gets aggravated when supplies of electronics spares to Tier III or remote plant sites are required on an urgent basis.
  • Reverse logistics is important, and challenges get multifold for electronics products.

In order to overcome challenges, you require detailing of your supply chain, vendors and customer base. Profiling of customer and analysis of customer need is critical. Different customer will have different needs. Plant break down equipment or spares will be required in hours. Whereas, new factory under installation will have different needs.

Channel partner or dealers will be looking for more delivery reliability at minimum cost. R&D or development centres will demand prototype/samples urgently. It is important to know the customer and work out the most efficient and cost-effective model. Based on different customer needs we have worked out different models.

When the supply chain model is finalised, the next step is to select the right logistics service provider. Based on the model, we use a 3PL service provider, where we need special services. We have contracted best-in-class logistics companies when it comes to express or special warehouse providers.

We have overcome many challenges as we learn from each challenge and relook at strategy, process, tools and monitoring system.

For an organization like yours that leads the digital platform on many fronts, how digitalised is Siemen’s Supply Chain. How do you plan to introduce further digitalisation in your supply chain?

We have converted most of supply chain information from physical form to digital form. This is helping us in digitalisation of our supply chain. EDI, online workflows, RFID and use of web-based solution form backbone and integration with vendors, customers and logistics service provider helped to eliminate multiple data entry in multiple databases, real-time information and transparency of information to all stakeholders.

Digitalisation will be the key to future success and we are focusing on an increased level of integration which will help analytics.

The present government claims that the customs procedures have been eased to a large extent. So, has it really been eased or not much has changed?

In the last two years, changes in customs procedures have made customs clearance much simpler. The new process has reduced clearance time and cost. Authorised Economic Operator (AEO) scheme has helped importers and exporters in many ways. Reduced interaction with customs officials, less physical control by way of increased RMS, cost savings due to differed duty, lower bank guarantee cost, Direct Port Delivery, Single window, E-Sanchit, digital signatures have not only cut down the paper trail but also helped the industry to a much greater extent.

Trade Facilitation Agreement (TFA) implementation is helping Industry and I am sure in coming days, the complete procedure of Custom Clearance will undergo a paradigm shift.

What are the major traits you see in your Logistics Service Providers (LSPs) at the time of choosing their services? Who are your major LSPs?

We have a very robust process for selection of Logistics Service Providers. However, there are some basic criteria which are applicable to all LSPs. We look for domain expertise, availability of skilled people, organisation set up, existing customer base, financial worthiness, the present status of digitation and readiness to integrate into our system.

More focus is given for new ideas, value addition, understanding of our business, flexibility and commitment from LSPs management. Even though cost is one of the main selection criteria, we see commitment from LSP in Health, Safety and Environment area.

You have proven your supply chain management capabilities several times in your long successful career. What learning and lessons would you like to pass on to the new generation professionals?

I am a strong believer that there is no substitute for knowledge. You need to learn every day. Skill update is a must. When I meet young enthusiastic B-School graduates who are selecting Supply chain/Logistics as mainstream I feel happy.

Recently, I was awarded Doctor In Excellence – Supply Chain (Honoris Causa) by a reputed US University. Such recognitions are possible when you honour knowledge and keep learning all the time. Supply Chain and Logistics in India is growing rapidly and technology and innovations are making changes every day and we are lucky to be part of this change.

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